HM Revenue & Customs (HMRC) is reportedly clamping down on 80,000 buy to let (BLT) landlords who may not have declared the amount of rent they have received, or may have claimed too much tax relief. Other landlords may have to pay back money owed over the past six years. It is feared that the tax bill they receive could force them into selling to pay it off.
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Penalties may also be imposed, with ‘ghost landlords’ – who have not declared that they are the owners – also targeted.
Both HMRC and the mortgage industry reacted strongly to the news. The HMRC dismissed the claims as scaremongering and claimed that landlords would not be singled out while industry analysts claimed that this was an exercise to improve communication with landlords.
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John Heron, managing director of Paragon Mortgages, said: “Our experience is that landlords in general are both astute and financially sophisticated, as befits a group that owns 2.8 million properties, more than one in ten of the nation’s housing stock. We find it hard to believe that there are significant numbers of landlords who have not made a proper declaration to the Inland Revenue – certainly there is no evidence to support such a claim.”
